State Street (STT) AI Stock Analysis

• Market Cap: $32.05B
• Dividend Yield: 2.69%
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): 12.7
• Beta (1Y): 1.03
• Revenue Growth: 11.66%
• EPS Growth: 67.88%
• Country: US
• Employees: 52,711
• Sector: Financial
• Sector Strength: 70
• Industry: Asset Management
• EPS (TTM): 2.53
• Shares Outstanding: 283,695,340
• 10 Day Avg. Volume: 1,678,885
• 30 Day Avg. Volume: 1,736,931
• PEG Ratio: 0.23
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 1.33
• P/FCF Ratio: -2.07
• Enterprise Value/Market Cap: 2.14
• Enterprise Value/Revenue: 3.05
• Enterprise Value/Gross Profit: 5.18
• Enterprise Value/Ebitda: 17.37
• 1Y Price Target: $117.38
• Price Target Upside: 3.91% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 73 Outperform
• Price Target: $124.00 ▲(9.77% Upside)

State Street's strong earnings call performance and attractive valuation are key strengths, driving a positive outlook. However, financial performance concerns, particularly cash flow and leverage, moderate the overall score. Technical indicators suggest a stable market position.

Positive Factors

Strategic Partnership

The partnership with Apex Fintech Solutions enhances State Street's digital custody and clearing capabilities, expanding its wealth services. This strategic move strengthens its competitive position in the global wealth management industry, supporting long-term growth.

Revenue Growth

Consistent revenue and fee growth indicate strong business momentum and effective execution of strategic initiatives. This trend supports the company's ability to sustain long-term financial health and shareholder value.

Operational Efficiency

Significant expense savings through productivity initiatives enhance operational efficiency. This focus on cost management is crucial for maintaining competitive margins and improving profitability over the long term.

Negative Factors

High Leverage

High leverage poses risks to financial stability, potentially limiting flexibility in capital allocation and increasing vulnerability to economic downturns. Effective debt management is essential to mitigate these risks.

Negative Cash Flow

Negative cash flow highlights potential liquidity concerns, which can affect the company's ability to invest in growth opportunities and meet financial obligations. Addressing cash flow issues is critical for long-term sustainability.

Regulatory Constraints

Regulatory constraints and potential changes can impact capital requirements and operational flexibility. Navigating these challenges is crucial for maintaining compliance and optimizing capital structure in the long term.

State Street Business Overview & Revenue Model

Company Description

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide. The company offers investment servicing products and services, including custody; product accounting; daily pricing and administration; master trust and master custody; depotbank services; record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors. It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data. In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies. Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded fund under the SPDR ETF brand. The company provides its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers. State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

How the Company Makes Money

State Street generates revenue primarily through its Investment Servicing and Investment Management segments. The Investment Servicing segment earns income by providing asset servicing solutions, including custody, accounting, and administration services, charging fees based on the assets under management (AUM) and transaction volumes. The Investment Management segment, particularly through State Street Global Advisors, derives revenue from investment management fees charged on the AUM of its clients, which include pension funds, insurance companies, and sovereign wealth funds. Additionally, State Street benefits from performance fees and client service fees, as well as fees from ETFs (Exchange-Traded Funds) and other investment products. Strategic partnerships with technology providers and financial institutions enhance its service offerings and operational efficiency, further contributing to its revenue streams.

State Street Financial Statement Overview

Summary

State Street shows strong profitability with high margins and improved net profit margin. However, high debt levels and negative cash flows are significant concerns, indicating a need for improved cash flow sustainability.

Income Statement

State Street's income statement shows a solid gross profit margin of 99.2% for TTM, indicating efficient cost management. The net profit margin has improved to 22% in the TTM from 20.8% in 2024, reflecting enhanced profitability. Revenue growth is modest with a 0.9% increase in the TTM period. However, EBIT margin at 25.4% is strong, and there's a notable recovery from the negative EBIT recorded in 2024.

Balance Sheet

The balance sheet reflects a stable equity position with an improving equity ratio of 7.2% in the TTM. The debt-to-equity ratio is relatively high at 0.93, posing a potential risk, although it has decreased from 1.31 in 2024. Return on equity is favorable at 10.7% for the TTM, indicating solid returns for shareholders.

Cash Flow

State Street's cash flow situation is challenging with a negative free cash flow of $6.54 billion in the TTM, although there is slight improvement from $14.14 billion negative in 2024. Operating cash flow is negative, suggesting cash generation issues. The operating cash flow to net income ratio is also unfavorable, indicating reliance on non-operational cash sources.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.47B	21.97B	18.37B	13.67B	12.03B	12.07B
Gross Profit	13.24B	12.84B	11.90B	12.11B	12.06B	11.61B
EBITDA	3.95B	4.00B	3.20B	4.48B	4.73B	4.41B
Net Income	2.85B	2.69B	1.94B	2.77B	2.69B	2.42B
Balance Sheet
Total Assets	376.72B	353.24B	297.26B	301.45B	314.62B	314.71B
Cash, Cash Equivalents and Short-Term Investments	140.84B	134.55B	136.24B	146.20B	183.45B	183.45B
Total Debt	38.13B	36.79B	24.37B	18.27B	15.18B	21.20B
Total Liabilities	349.41B	327.91B	273.46B	276.26B	287.26B	288.51B
Stockholders Equity	27.31B	25.33B	23.80B	25.19B	27.36B	26.20B
Cash Flow
Free Cash Flow	-11.79B	-14.14B	-126.00M	11.22B	-7.52B	2.97B
Operating Cash Flow	-10.77B	-13.21B	690.00M	11.95B	-6.71B	3.53B
Investing Cash Flow	-32.30B	-39.48B	12.74B	6.82B	-2.17B	-65.53B
Financing Cash Flow	44.19B	51.79B	-13.35B	-18.43B	9.05B	62.17B

State Street Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 112.96
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STT, the sentiment is Positive. The current price of 112.96 is above the 20-day moving average (MA) of 112.92, above the 50-day MA of 111.85, and above the 200-day MA of 98.75, indicating a bullish trend. The MACD of 0.29 indicates Positive momentum. The RSI at 52.48 is Neutral, neither overbought nor oversold. The STOCH value of 67.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STT.

State Street Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BK	79 Outperform	76.24B	16.60	10.96%	1.79%	7.41%	51.70%
SEIC	76 Outperform	10.63B	16.18	29.48%	1.14%	10.55%	40.74%
BEN	76 Outperform	12.24B	46.08	2.53%	5.39%	4.72%	-67.85%
STT	73 Outperform	$32.05B	12.66	10.94%	2.69%	11.66%	67.88%
TROW	72 Outperform	22.73B	11.70	19.30%	4.88%	4.43%	5.55%
NTRS	71 Outperform	24.77B	15.34	13.47%	2.36%	3.44%	16.76%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

State Street Corporate Events

State Street Reports Strong Q2 2025 Financial Results

On July 15, 2025, State Street reported its second-quarter 2025 financial results, highlighting a record $49 trillion in assets under custody and administration and $5 trillion in assets under management. The company achieved a 6% increase in diluted earnings per share and an 11% increase in total fee revenue compared to the previous year, demonstrating strong financial performance and strategic execution amid market volatility. The results underscore State Street’s robust operational foundation and its focus on delivering long-term growth and value for shareholders.